Bearings are designed to withstand heavy loads under rolling conditions, for an extended period. During long operation times, bearing material undergoes cyclic deformation known as rolling contact fatigue (RCF). The RCF causes microstructural alterations within the material, which results in failure of bearing. The aim of this study is to characterize these microstructure alterations and measure the evolution of mechanical properties of the deformed region, and to develop a numerical model that can explain the mechanism of formation of microstructure alteration with the help of the experimental result and test conditions.Ball/ V-Ring tests were conducted on M50 steel ball bearing for different number of cycles to systematically produce rolling contact fatigue (RCF) affected regions in the subsurface of the bearings. The deformed subsurface microstructure is observed as a white etched region (WER) under optical microscope. The evolution of size of RCF affected region is measured by optical microscopy, and the microhardness values were measured by microindentation technique. The reason for the microstructure alteration and hardness evolution at subsurface is explained with the help of the Hertzian contact stress theory [4]. Based on the experiment result, and a dislocation assisted carbon migration theory was used to model predict the WERs formation. WERs consist of nano-sized dislocation cells with carbon segregated cell walls. Neuber’s rule is used to determine local plastic strain amplitude at various material points within RCF affected region WERs formation was predicted for the numbers of RCF cycles, i.e., 37.2 M, 298.3 M, and 652.9 M.